The Daily Digger

From Bloomberg: Chesapeake Energy Corp. (CHK) , the second-biggest U.S. natural-gas producer, said  Michigan  is cherry picking the company’s internal e-mails to suggest its former chief executive officer invited Canadian rival  Encana Corp. (ECA)  to join in dividing the state’s oil and gas lease bids.   The competitors in March were charged by the state with conspiring to divvy up the counties in which each would seek resource exploration rights before a May 2010 auction, driving bid prices down to $40 per acre from $1,510.   Michigan’s lawyers cited Chesapeake e-mails that included suggestions the two companies “throw in 50/50” on the bids. In a filing yesterday in state court in Cheboygan, the company cited other portions of some of the same e-mails to show the former CEO,  Aubrey McClendon , was open to competition.   McClendon told his staff in a June 25, 2010, message that he was determined to “compete and win” on the leases and t...

Cambridge, OH  –  The Guernsey County Foundation  Trustees gathered this morning to celebrate their work and to meet with CEO and President of Gulfport Energy Mike Moore.  Moore joined the Guernsey County Foundation during their breakfast to learn more about the community and build awareness for a new resource, the Gulfport Energy Fund. Moore, who announced the opening of the new Gulfport Energy office in Saint Clairsville on Wednesday, spoke about the creation of the Gulfport Energy Fund at the Foundation for Appalachian Ohio and shared Gulfport’s long-term outlook on philanthropy and investing in the regions where they do business. “I was so impressed by the work happening in Guernsey County,” said Moore. “The Trustees leading the Guernsey County Foundation are dedicated to making a difference across the county and that is exactly what we plan to support through the Gulfport Energy Fund. Gulfport looks forward to helping nonprofit, educational, and communi...

From Shale Play: Canfield-based Pecchia Communications had been supporting BP America through their public relations as the company explored the possibility of oil and gas development in the Mahoning Valley.  "BP will be missed," said Dan Pecchia, president of Pecchia Communications.  "The local and Houston leaders seemed genuine about doing all the right things here. They honored their commitments to landowners and seemed deeply interested in what local people thought of the company.  "They freed up sizable sums for local donations, and also sought out the best beneficiaries for those donations," Pecchia said.  Along with BP's departure will be a loss of a corporate partner that invested $100,000 in a STEM (science, technology, engineering and mathematics) program for Trumbull County students and provided smoke detectors through the fire chief's association. Read the whole article here. Connect with us on Facebook and Twitter! Follow...

From Shale Play: During Chesapeake Energy's first quarter earnings call, Chris Doyle, senior vice president of operations for the northern division, said the company will provide more detailed information regarding its Utica Shale play operations soon  Chesapeake is the largest oil and gas leaseholder in Ohio and has many leases in Columbiana County.  There are 102 oil and gas horizontal drilling permits in Columbiana County, and there are 43 drilled wells with 22 of those producing. Read the whole article here. This news comes after multiple Utica shale drillers have announced that their expectations for production from the Utica shale are lower than previously stated for 2014. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

From WTOV: With the oil and gas boom in the area -- and no real formal training offered to prepare workers for the industry -- a new school, the Utica Shale Academy, will give students the tools they need to enter the workforce. There students learn the growing industry and founders hope it will keep young graduates in the area. Open to any student in grades 9-12 in the state of Ohio, the academy serves a vocational school role. Students will graduate with one of two certificates -- a rig pass or a safety certificate in well management. Once completed, they will be able to step directly on the well pad and begin working.  "We started with certificate and job ready right out of high school," Dr. Chuck Kokiko of Jefferson County Education Service said. "We also have a strong program for those that want to get an associate's degree in an oil or gas-related field. And also we're exploring options for those kids who may want to be in a petroleum project or four-...

After last week's permitting update from the Ohio Department of Natural Resources showed over 400 wells producing in Ohio's Utica shale, this week's has the number back down to 399. There were 19 new permits issued last week.  Noble County was the hot spot, with 8 of those permits (all to Antero Resources).  There were 4 new permits issued for Guernsey County, 2 each for Carroll, Belmont, and Monroe counties, and 1 permit for Harrison County. The cumulative total for permits issued now stands at 1,283, with 869 wells drilled.  The Utica rig count is 43. Click here to view the entire report. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Source: Peter Byrne of The Energy Report (5/22/14) http://www.theenergyreport.com/pub/na/surfing-the-volatility-curve-with-jason-wangler There is money to be made as oil and gas prices fluctuate. Wunderlich Securities' Analyst Jason Wangler is no Pollyanna—he casts a cold, analytical eye on the volatility of the energy markets. In this interview with The Energy Report , Jason explains how to create a solid portfolio of attractive North American juniors—with lucrative side trips to South America and Africa. The Energy Report: Jason, you focus on the growth of junior oil and gas companies and the expansion of wells in the Midwest and Southwest of the U.S. What is the macroeconomic view of this sector so far this year? Jason Wangler: Energy is doing well. Oil and natural gas production is robust. The Bakken in North Dakota, the Niobrara in Colorado, and the Permian and Eagle Ford in Texas are all showing great results. Booming oil and gas production numbers are translating int...

From the Akron Beacon Journal: The volume of drilling wastes injected in Ohio grew by nearly 15 percent last year, almost entirely due to increasing in-state Utica shale production.  Data compiled from the Ohio Department of Natural Resources show that Ohio accepted more than 16.3 million barrels of liquid waste in 2013 — enough to fill a train of tanker cars nearly 242 miles long.  Waste volume from out-of-state drilling sources remained basically the same from 2012 to 2013. The sharp change came from in-state, as liquids produced in Ohio grew from 5.9 million barrels to nearly 8.1 million barrels, an increase of 36.7 percent.  Trumbull County was the No. 1 destination for the liquid waste in 2013, with more than 2.3 million barrels pumped into underground storage there. Portage County ranked second at almost 2 million barrels. Stark County was ninth with 607,698 barrels.  “Those numbers are not surprising and seem reasonable based on what’s been happening...

From the Akron Beacon Journal: The Beast is getting bigger.  The Beast is the term that Texas-based Momentum Midstream spokesman Eric Mize lovingly uses to describe the new and growing liquids-separating complex in northern Harrison County.  He also refers to the sprawling facility as the Big Boy. "It is a big plant, a very big plant and far bigger than other plants around here.…What’s really amazing that we got it up and running in six months. No one believed that we could do that."  The facility, part of $1.6 billion three-plant processing complex, sits at the edge of tiny Scio with its 760 residents and one traffic signal.  The so-called fractionation plant is designed to separate the natural gas liquids that come from Ohio’s Utica shale, store it and ship it. The plant is a mile long and half mile wide.  The Scio plant processes 90,000 barrels a day today and that volume will soon be growing again. Read the rest of this article by clicking her...

From Unconventional Gas: In the past nine months, McClendon had raised a breathtaking $8.5 billion of institutional capital, started five companies and acquired production of 25,000 barrels of oil equivalent per day on 600,000 net acres. The parent company has grown to 325 from 16 employees, with about 30 new people joining every month.   McClendon is also forming a company that will allow investments by third-party broker dealer networks called American Energy Capital Partners LP, with $2-$3 billion capital raised.    Asked by Hart Energy if his high-profile status has opened doors to his raising capital, McClendon drew laughs by saying that during his time with Chesapeake he was caught in a “journalist drive-by shooting. My problem was I was in a cul-de-sac.”   Ultimately, he said his backers are people who “respected what I tried to stand up for and build over the last 30 years. It’s a lot of fun to be back out there.” You can read the entire artic...

From Shale Play: Village officials in Barnesville on Monday set the record straight regarding a proposed plan to allow the East Ohio Regional Industrial Park on Ohio 800 to accept gas drilling waste products.  Barnesville Village Council hosted a town meeting Monday night regarding the project, which has been approved by the Belmont County Port Authority Board of Trustees, which oversees the park.  However, public opposition built when residents thought fracking waste would be dumped there. Council called the meeting to present facts about the project and dispel misinformation. A company from Columbus, EnerGreen360 has developed a technique to clean and solidify top hole drill cuttings from gas wells.  There is no fracking waste involved; the material is the dirt from the drilling process, which may have trace amounts of refined oil-based substances only from the drill bit. Read the whole article by clicking here. Connect with us on Facebook and Twitter! ...

Tom Stewart From The Morning Journal: With 80,000 hydraulic fracturing wells in Ohio, Tom Stewart, a lobbyist for the oil and gas industry talked about the Utica shale currently being drilled in Columbiana County and the history of oil and gas production throughout the state.  Stewart, the executive vice president of the Ohio Oil and Gas Association, said his grandfather was in the oil production business. He talked about production from the 1880s forward and the difference hydraulic fracturing, also known as fracking, has meant to the latest boom in Ohio.  "Nowhere in the world is there more sophisticated drilling equipment than in Appalachia," Stewart said, "except when you are looking at offshore drilling."  After the second Ohio boom in 1950s, it became apparent there needed to be oil and gas drilling regulations in Ohio, Stewart said. Drilling fields were placed right next to each other, poorly utilizing resources. Click here to read the rest of th...

The latest weekly permitting report from the Ohio Department of Natural Resources reveals that the state has passed another milestone in Utica shale production. In total, 20 new permits were issued for the week of May 11 to May 17.  Noble County took center stage, with 9 of the 20 permitted wells located there (4 for CNX Gas Company and 5 for Antero Resources).  5 permits were issued to Aubrey McClendon's American Energy Utica for Harrison County wells, 4 were issued for Chesapeake Energy wells in Carroll County, and Belmont County rounds out the report with 2 permits to Gulfport Energy. There are now 1,272 permits for horizontal drilling in the Ohio Utica shale.  865 wells have been drilled, and the number of wells producing has crossed over the 400 mark, hitting 401.  The Utica rig count is 44. Click here to view the report. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Some are surprised that Chesapeake sees the Utica shale as a big growth driver From Fuel Fix: Just a month after BP decided to take a $521 million hit to abandon its plans for the Utica Shale , Chesapeake Energy last week called the region its “newest world-class asset.”  It was the second surprising determination that Chesapeake executives made this year on where the company could find its biggest future growth drivers. The first out-of-the-blue call came in February, when the Oklahoma City-based oil and gas producer told investors it would march back into the gas-rich Haynesville Shale in northwestern Louisiana, East Texas and southwestern Arkansas .  The Utica, an Ohio shale play that operators originally believed would yield large bounties of pure oil, turned out to have much bigger deposits of natural gas and natural gas liquids. Chesapeake and others “whiffed” on the Utica a few years ago, but now the company believes it’s going to be “a big growth driver,” sai...

From Columbus Business First: When I first started at  Columbus Business First , a few oil and gas lawyers and engineers gave me grief because of how I spelled the shorthand term for “hydraulic fracturing,” the drilling process where underground rocks are fractured to help extract oil and natural gas. Within the industry, it’s always been spelled “fracing” or sometimes “fraccing.” I’ve been told the media, of which many of you remain suspicious, uses the term “fracking” like a pejorative, much like activists do, and spell it their way too. The Associated Press Stylebook, which most journalists stick to as part dictionary/part encyclopedia, early on declared “fracking” was right, but I’d still get complaints from industry folks. One attorney emailed me in January with the subject line “Misspelling of Fracing,” and suggested I call oil heavyweights  Halliburton , Weatherford and Schlumberger. “They will tell you the correct spelling of FRACING. Take it from companies that...

Wiley Online Library:   A bridge to nowhere: methane emissions and the greenhouse gas footprint of natural gas   -    "In April 2011, we published the first peer-reviewed analysis of the greenhouse gas footprint (GHG) of shale gas, concluding that the climate impact of shale gas may be worse than that of other fossil fuels such as coal and oil because of methane emissions. We noted the poor quality of publicly available data to support our analysis and called..." Akron Beacon Journal:   Chesapeake Energy says it likes Ohio’s still-developing Utica shale   -    "Oklahoma-based Chesapeake Energy Corp. really likes Ohio’s Utica shale.  That message was repeated several times by vice president Chris Doyle at the company’s Analyst Day 2014 on Friday in Oklahoma City.  Analysts may have had a difficult time gauging the Utica shale because of the lack of data and production delays, and Chesapeake has said little..." Bloomberg:   Ches...

From a Chesapeake Energy press release: Chesapeake Energy Corporation (NYSE:CHK) today updated its currently anticipated 2014 asset sales and divestitures and the projected impact of such transactions on its 2014 Outlook. The company also introduced preliminary estimated ranges for its 2015 adjusted production growth and total capital expenditures. These items will be discussed in more detail at the company's 2014 Analyst Day event, to be held in Oklahoma City this morning.   Chesapeake continues to divest of noncore assets in order to focus its resources on its highest rate of return opportunities and reduce balance sheet leverage and complexity. The company currently anticipates the following transactions will be completed during the 2nd and 3rd quarters of 2014.   Chesapeake to Proceed with the Spin-off of its Oilfield Services Business   Chesapeake previously announced on February 24, 2014, that it is pursuing strategic alternatives for its oilfield services b...

From Energy in Depth: For many years, environmental activists have pushed for bans, moratoria, or other restrictions on hydraulic fracturing (“fracking”), alleging the process is a threat to public health and the environment. But in recent months, increasing numbers of environmentalists have distanced themselves from the “ban fracking” agenda. Many have even embraced shale gas on environmental grounds, revealing how extreme and marginalized the campaign to restrict hydraulic fracturing has become.   “Environmentalists who oppose the development of shale gas and fracking are making a tragic mistake,” wrote  Richard Muller  last year. Muller, a physicist and climate expert at the University of California-Berkeley, was viciously attacked by activist groups like  Greenpeace , but Muller’s position may actually be more in line with a growing public understanding of the environmental benefits of shale gas.   In April, the Environmental Protection Agency releas...

From The Columbus Dispatch: A fracking-tax bill that supporters say will provide long-term clarity for companies coming to Ohio to drill in the state’s shale regions passed a divided Ohio House yesterday.   The bill sets a  new 2.5 percent severance tax on shale fracking , a rate Democrats decried as a giveaway to the oil and gas industry, and as an overall tax shift because much of the revenue will go for an annual income-tax cut that, they argue, favors the wealthy.   “We think it’s OK to be fooled by the oil and gas industry,” said Rep. Robert F. Hagan, D-Youngstown. “Why are we so afraid to make them pay their fair share?”   But as the fracking industry tries to emerge in Ohio, Speaker William G. Batchelder, R-Medina, said the state doesn’t want to do anything to chase away companies. Read more here. Further on this story, there is this from the Ohio Oil and Gas Association: From Thomas E. Stewart, executive vice president of the Ohio Oil and Gas A...

From The Motley Fool: On Thursday shares of  Gulfport Energy ( NASDAQ:  GPOR     )  , one of the biggest exploration and production companies in the Utica Shale of eastern Ohio, dropped by a whopping 18% in the wake of the company's quarterly results. In short, shares dropped due to new guidance issued by management. Gulfport significantly reduced its own 2014 production guidance and announced a new strategy going forward. This article will look at Gulfport's change in strategy and it will also look at Gulfport's new valuation in light of Thursday's steep drop.   Fallout   There are actually several reasons for Gulfport's drop on Thursday. However, the biggest reason is, by far, revised guidance: Management now expects to produce somewhere between 37,000-42,000 barrels of oil equivalent per day, revised downward from 50,000-60,000. The rationale for this revision is that Gulfport has decided to go from a production-maximizing strategy to a valu...

The latest weekly permitting report from the Ohio Department of Natural Resources reveals that Ohio's Utica shale is closer to another milestone number. 19 new permits were issued last week.  Both Guernsey and Harrison counties saw 5 new permits issued, with 7 of those 10 permits going to Aubrey McClendon's American Energy Utica.  Chesapeake Energy was issued 3 more permits in Carroll County, while Antero Resources received 3 new permits in Monroe County.  Belmont, Columbiana, and Jefferson counties finished off the report with 1 permit each. There have now been 1,262 horizontal drilling permits issued in Ohio's Utica shale.  849 wells are drilled, and 399 are producing.  The Utica rig count is 39. View the report here. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Energy in Depth:   GAO Report a Testament to States’ Effective Regulation of Oil and Gas   -    "This week, the U.S. Government Accountability Office (GAO) released a new report , which states that the Bureau of Land Management’s (BLM) regulation of oil and gas development leaves room for..." Akron Beacon Journal:   Chesapeake Energy plans to begin exploring natural-gas-only areas in eastern Ohio   -    "Chesapeake Energy Corp. will soon begin exploring its natural-gas-only areas in eastern Ohio.  The company is “excited about some of the tests that we’ve seen” on the dry-gas areas, spokesman Chris Doyle said Wednesday in a teleconference/earnings call with analysts on..." Youngstown Vindicator:   Youngstown voters reject fracking ban in city for the 3rd time - "With city voters rejecting a citizen-initiative charter amendment to ban fracking in the city for the third time in a year, supporters of the Community Bill of Rights ...